Greetings,
I usually wouldn’t post late at night, but if it’s newsworthy, why not? We are seeing flows at Westcoast’s Station 4 gapping up:
Flows stabilized at around 650 MMCF a week after the explosion and have been on a steady recovery since. Beginning on Nov 9 and through Nov 19 (10 days) averaged 1,111 MMCF, or about 460 MMCF higher than post-explosion. Then this week things changed, flows increased another 200 MMCF to 1.3 MMCF. This is an ineresting level as it is identical to what flowed from Aug 10 to Sep 10, prior to the explosion.
This change can be seen at Huntingdon, the southern terminus of Westcoast.
The two plots are perfectly parallel and, like Station 4, Huntingdon is back to where it was for a month this summer. That doesn’t mean the pipe is back to 100%, note where flows were last winter, still 530 MMCF lower. Assuming Sumas takes half the haircut, that would put the total cut at 265 MMCF. However, that assumes more gas doesn’t flow, something we wouldn’t bet against.
So what’s happening at Sumas?
Flows are up, but not as much as at Huntingdon and the pipe is still receiving 500 MMCF less than pre-explosion and 700 MMCF less than last year’s peak. A couple of possible explanations why Sumas isn’t seeing the same rally as Huntingdon.
- Lag – Perhaps Northwest Pipe hasn’t updated its noms yet, or is not as fast as Enbridge. If that’s the case, tomorrow we should see Sumas jump 100-200 MMCF.
- Bogart – all new flows are going into Fortis’ service territory leaving the Americans high and dry. LOL, doubt, contractually, that can happen but we’ll know in a few days.
I’ll be watching this over the weekend, here is the dashboard of all of the above charts – Enbridge Explosion.
It is my opinion that if the flows are fully restored the largest correction in the history of MidC will take place over maybe a day or two. Interesting, now that we are seeing signs of a restoration, fading the recent moves has become a more viable strategy. We still like selling the backend rolls; those are all miss-priced around $10-20.
Happy Holidays,
Mike